Overview 

Aviation accounts for over 3%-70% of U.S. exports to Ethiopia, depending on the year.  Prior to the spring of 2020, the sector had been growing rapidly with rising demand for air transportation, both passenger and cargo. It will continue to play an outsized role given Ethiopian Airlines’ status as the leading airline on the continent, and the airline’s infrastructure ambitions.  

The Ethiopian Airports Enterprise (EAE), a company within the Ethiopian Airlines Group, carried out an expansion of the Addis Ababa Bole International Airport, under a $345 million contract with China Communication Construction Company. The objective is to triple the capacity of the airport from seven million passengers per year to 21 million. The first phase of the Bole International Airport expansion project was completed in early 2019. EAE also has plans to build a major airport outside of Addis Ababa with a capacity of 100 million passengers per year at a cost of $5 billion. The new airport would be built outside of Addis Ababa at a lower elevation, reducing jet fuel consumption and enabling flights of a greater distance. Aéroports de Paris Ingénierie (ADPI), a French airport engineering and design firm, completed a feasibility study for EAE, which included identifying the project site in Bishoftu, 50 kilometers from Addis Ababa.  In early 2021, EAG floated an RFP to hire an engineering, design and project supervision consulting firm that will conduct design reviews, define the requirements of the airport, prepare tender documents for securing the airport development contractor and carry out bid evaluation and supervision of the airport development project. EAG received only two qualified proposals in response to the RFP, one from a consortium led by a U.S. engineering firm and another from a Lebanese design firm with U.S. subsidiaries.  EAG decided to retender the RFP making some adjustments to the RFP and refloated the tender with a new closing date for submission of proposals set on August 20, 2021. The same two bidders responded to the second RFP. EAG management decided to thoroughly review the master plan as well as the RFP before releasing a third tender. 

Ethiopian Airlines Group has noted it is open to operating and ownership models for the new airport, including build, operate and transfer (BOT) and public private partnership (PPP).  Regardless of the operating and ownership model, a successful bidder will be expected to offer financing options.  

The Government of Ethiopia (GOE) drives growth in the domestic aviation sector by building airports throughout the country. EAE had a goal of increasing the number of total airports in the country to 25 by the end of 2020, but as a result of the COVID-19 crisis many major infrastructure projects will be delayed.   

During the past decade, Ethiopian Airlines Group has registered average revenue growth of 20% per annum. EAG has been following an aggressive 15-year plan, called vision 2025, with a goal to make EAG the most competitive aviation group in Africa. According to CentreforAviation.com, EAG operates the largest number of aircraft in Africa followed by Egypt Air.  EAG today operates about 135 aircraft, with about 62% supplied by Boeing. EAG aspires to retain its leading African airline position in both passenger and cargo loads. 

In March 2022, EAG CEO Tewolde Gebremariam, who played a significant role in the transformation of the airline as the continent big carrier, resigned from his post for health reasons. Following his resignation, the government of Ethiopia appointed Girma Wake as board chairman of EAG and Mesfin Tasew, who was a former Chief Operation Officer of EAG and CEO of ASKY Airline, as the new Ethiopian Airlines Group CEO. 

Under Vision 2025, EAG seeks to double its fleet numbers, increase the number of destinations to 125, carry more than 18 million passengers and 800,000 metric tons of cargo, and improve its current $2.5 billion annual revenue to $10 billion.  EAG is looking to renew and expand its flight operations using the following aircraft: 

• Bombardier Q400 airplanes for domestic flights, 
• Boeing 737 for mid-range flights 
• Boeing 787 (replacing both Boeing 757 and Boeing 767) for the long range and 
• Boeing 777 and Airbus A350 for the extra-long range. 

EAG at the moment owns 135 modern and young aircrafts, 23 airports and flies to 127 international destinations, including New York, Newark, Washington, D.C., and Chicago. These flights have facilitated greater commercial linkages between the United States and Ethiopia. 

Ethiopian Airlines took delivery of its 100th aircraft, a Boeing 787-900, in 2018.  The company selected the GE GEnx engine to power these six additional Dreamliner aircraft increasing the Airlines’ GEnx-powered B787 aircraft to 19 in total. Boeing aircraft with GE engines constitute a majority of EAG’s current operating fleet. At the moment, EAG operates 135 aircrafts with 85 of them being various models of Boeing aircrafts, 18 Airbus A350-900XWB and 32 Q400 Bombardiers.  In addition, Ethiopian Airlines Group has 35 aircrafts ordered waiting for delivery with 33 of the orders from Boeing: 2 Boeing B787-9, 1- B737-800SF, 25- Boeing B737 MAX 8s, 5 - B777-200LRF and 2- Airbus A350-900XWB. 

In 2020, EAG transported 9.6 million passengers, and moved over half a million tons of cargo with no other African airline nearing those numbers. At the moment, EAG is the only African carrier that transport Covid-19 related medical supplies including Covid-19 vaccines throughout Africa.  

EAG has invested $100 million in expanding and upgrading its aviation academy. The scale and scope of the expansion seals the academy’s position as the largest and the most advanced aviation academy in Africa with an annual intake capacity of 4,000 students training in piloting, aircraft mechanics and technicians, cabin crew, ticket agents and procurement officials. In addition, EAG has invested another $100 million for the first phase of a new cargo terminal that will increase its cargo carrying capacity to 1 million tons, for both dry and perishable goods. The cargo terminal began operating in 2018. 

Ethiopian Airlines is expanding fast into West Africa with Togolese ASKY Airlines. EAG is also partnering with Air Cote d’Ivoire, Congo Airways and delivers management services to CEIBA International in Equatorial Guinea. The airline has ambitious plans; EAG is working with the Zambian government to relaunch its national carrier with a 45% stake.  It also plans to establish a wholly-owned airline in Mozambique and has signed a contract to start an airline in Guinea. EAG has also taken a 49% stake in a Chadian airline. EAG has partnered with DHL Global Forwarding to form a joint venture called DHL-Ethiopian Airlines Logistics Service with an investment of 10 million Euros. According to the partners, the JV conducts business throughout Africa, consequently improving Ethiopia’s logistics infrastructure and connections. EAG has also announced its intention to buy a 20% stake in Eritrean Airlines. 

In the past 25 years, small private airways emerged operating small aircraft carrying less than 50 passengers, a regulatory maximum for private operators. These private airlines usually provide local flight services, mostly chartered flights, to remote locations for the diplomatic community, private entities and humanitarian non-governmental organizations.  

There are several market opportunities for U.S. companies in airport security, aircraft and other aviation support equipment and aviation infrastructure development. 

 

Market size: Aircraft and parts               Unit: USD  

 (total market size = (total local production + imports) - exports) 

Leading Sub-Sectors 

- Aircraft and engine sales and leasing to both EAL and smaller charter airlines; replacement parts; and airport equipment, including transportation security technology. 

- Flight and cargo management information systems. 

- Engagement in airport infrastructure design, supervision and development and airport safety and security systems. 

- Engagement in airports commercial development and modernization projects. 

- Services associated with the privatization of EAL, such as valuation, issuance, and other advisory services. 

Opportunities 

EAE has carried out a feasibility study and location reviews for the Bishoftu airport outside of Addis Ababa. Tenders for design and construction of the new major airport are expected to be refloated. These tenders represent future opportunities for U.S. infrastructure firms. There are many opportunities for U.S. companies to bid on the design and construction of the major airport. Additionally, the new airport will need equipment, machinery, and structures related to indoor and outdoor facilities, including new headquarters, baggage handling, shopping centers, a new cargo terminal, transfers, and parking. Other domestic airports will also require communication, safety, and security equipment as planned upgrades occur in coming years. EAE requires ICT infrastructure and a commercial development plan, which should pave the way for U.S. companies to bid on upcoming tenders. 

Resources 

U.S. Foreign Commercial Service,  

Teddy.Tefera@trade.gov 

 

Ethiopian Airlines 

 

Abyssinian Flight Services  

 

Zemen Flight Services 

 

Ethiopian Airports Enterprise  

 

Ethiopian Civil Aviation Authority 

http://www.ecaa.gov.et/